Impact of information communication technology infrastructure on e-banking at Barclays Bank Kenya.

Abstract

The purpose of this study is to examine the extent to which the existing ICT infrastructure in Kenya affects the provision of e-banking services at Barclays Bank of Kenya. The study also compares e-banking applications in Kenyan banks with best practice examples from other countries. Other areas studied are the existing ICT and e-banking security systems as well as the policy and regulatory framework that governs e-banking systems in Kenya. The dilemma still facing the banking and ICT sectors in Kenya is whether the existing ICT infrastructure is adequate and efficient enough to satisfy the demand for voice and data communications required in the provision of e-banking services. The problems that require attention are lack of appropriate equipment to serve a modem financial system and provide the full range of e-banking services, inadequate telephone landlines due to vandalism and failure of Telkom Kenya to expand its network. Other problems include lack of reliable Internet connection, high access costs for landlines and Internet, inadequate capital investment for the provision of sufficient ICT services, dumping of contraband traffic on Telkom's network, cyber crime due to lack of proper e-banking security systems and lack of a suitable policy and regulatory framework for Information Communication Technologies. A qualitative research methodology and a typical case study research design are adopted in the study. Barclays Bank of Kenya is examined as a case study. The activities of the banking and ICT key industry players, Central Bank of Kenya, Telkom Kenya, Communications Commission of Kenya and Today's Online, are also examined. In addition four other commercial banks namely, Standard Chartered, Citibank, Kenya Commercial Bank and Commercial Bank of Africa are contacted and their senior management interviewed concerning this study. Data is collected from interviews, archives, newspapers, published reports and the Internet. The study findings reveal that Barclays Bank Kenya offers different forms of e-banking services namely, Internet banking, online banking, telephone banking and mobile banking. However, the poor state of the ICT infrastructure hinders the growth of ebanking services in Barclays and other Kenyan banks. The existing security measures for landlines and e-banking systems in Kenya are also incapable of preventing most forms of risks and threats and need to be improved. Kenya also lacks a sound policy and regulatory framework to efficiently curb these ICT and e-banking risks. The study concludes by recommending that the Kenyan government should encourage the private sector and development partners to invest in ICT infrastructure and that a comprehensive review of existing laws relating to ICT and e-banking systems be done and amendments formulated.